Volvo's long road ahead

Just before Christmas, I was walking down Teddington High Street, near Autocar’s Middlesex base. I heard the once-familiar warble of a Volvo five-cylinder engine and looked around to see an R-plate V70.
When I joined Autocar in 2004, Teddington’s affluent streets were dominated by Volvos. The town even had its own main dealer. Today, the dealer’s gone and Volvo’s road-side presence is greatly diminished. So, whatever happened to Volvo?

Just before Christmas, I was walking down Teddington High Street, near Autocar’s Middlesex base. I heard the once-familiar warble of a Volvo five-cylinder engine and looked around to see an R-plate V70.

When I joined Autocar in 2004, Teddington’s affluent streets were dominated by Volvos. The town even had its own main dealer. Today, the dealer’s gone and Volvo’s road-side presence is greatly diminished. So, whatever happened to Volvo?

It’s 20 years since the launch of the front-drive 850-series, a range designed to break with the company’s past. Models such as the dramatic T-5R should have been enough to change perceptions of Volvo.Ultimately, they weren’t.

While Volvo’s re-invention was well-timed (BMW, Mercedes and Audi all hit the revolution button in the early 1990s) it just didn’t carry through the huge growth in sales that the Germans managed. In recent times, Volvo sales peaked in 2004, at 456,224 units, thanks to the XC90 and the first S60 and 458,323 in 2007.

The crunch and an ageing and off-pace model range saw output slump to just 334,808 in 2009. In 2010, the year Ford sold Volvo to Chinese manufacturer Geeley, sales climbed to 387,802, but still very disappointing for a premium brand, recognised globally. This year, it should be back to near 450,000 units, but it is still way behind its German rivals.

The Chinese bosses are expecting sales to hit 800,000 by 2020.I n the UK, perhaps the biggest hurdle is the unyielding brand image. In 2010, political bloggers exposed ‘Project Volvo’, which was the plan to get Gordon Brown, then Chancellor, into No10 Downing Street as Prime Minister.

The biggest hurdle, according to the research which was carried out before the credit crunch hit, was the public viewing Brown as a human ‘Volvo’: safe and reliable but very dull. But Volvo has a number of bigger problems.

Building cars in Sweden and Belgium and selling them in the US is often unprofitable. It also makes 10 different model lines, in relatively small numbers. In 2010, the biggest seller was the XC60 (83,670 in 2010), the V70 hit 70,945 units, but the S40 and V50 managed just 82,968 units. Hopeless, when the premium C-segment is booming thanks to downsizing.

Even so, the new S60 has done much to boost sales in 2011 well north of 400k. Aside from pushing sales in China (just 30,522 units in 2010), and whispers the XC sub-brand could be the key to a bigger future, Volvo’s Golf-rivalling hatch - due to be unveiled at the Geneva show in March - is a really crucial model.

And this year’s revelation that the company’s new platform (which will stretch from S40 to XC90) will only be available with four cylinder engines is impressively bold.